Catch problems early in a lower cost setting! Not so simple, explain Harvard researchers who found 58% of retail clinic visits did not replace physician appointments, increasing costs.

Have employers found any health care gold at the end of a rainbow? Little, according to Northwestern University researchers in a recent American Journal of Accountable Care article. “Efforts to date have produced few promising strategies,” they concluded.

Does that mean employers should stop chasing rainbows? On the contrary! We need more employers chasing more rainbows. New rainbows. “No one really knows what will or won’t work. And we won’t know until we try some things,” urges Wal-Mart’s benefits leader, Sally Welborn.

More important than chasing rainbows, employers must become better health care buyers. Leveraging nearly $650 billion in annual spending, employers need to negotiate harder for better deals, form alliances to master the supply chain, work locally for greater value, align with government payment reforms wherever possible and contract directly with innovative providers.

Employers Negotiating Better

Given the money they spend on health care and their negotiating prowess as business people, employers should get better health care deals, especially on expensive drugs. They’re not, says Dr. Robert Galvin, formerly of General Electric and now CEO of Equity Healthcare.

“Baffling” is how he describes what he calls employers’ “weak-kneed behavior”. “No other group has a greater stake in buying smarter. But employers have always been reluctant actors in the health care system, as they feel out of their depth,” he explains.

Most employers are not in the health care business. Still, Galvin wants them to bargain more effectively with pharmacy benefit management (PBM) firms and health insurers. These expert intermediaries, he cautions, do not fully align their interests with those of their employer clients. At Equity Healthcare, Galvin negotiates for private-equity-owned employers like Toys R Us, Sea World, La Quinta and J.Crew.

Employers Forming Alliances

Large employers have been at the forefront of attempting to change health care. Still, even the pioneers and expert buyers among them are dissatisfied with their progress. Twenty of them have formed the Health Transformation Alliance, including value based insurance design pioneer Pitney Bowes and Caterpillar, which maintains its own prescription drug formulary.

“We’ve done what we can as individual companies. By joining together, we can do more,” said Marc Reed chief administrative officer of Verizon. The Alliance will serve as part of each company’s health strategy, fostering increased innovation, better data analyses and greater leverage to make the “current multilayered supply chain more efficient.” Their first project, slated for 2017: More affordable prescription medications.

Despite the involvement of companies like Pitney Bowes, Caterpillar, Verizon and other blue chip employers, some observers have given the Alliance a ho hum reception. Noting the already “crowded field” of business health groups, Forbes health correspondent Bruce Japsen observed, “it is just one of a number of similar, overlapping efforts that have so far failed to keep the rate of employer medical cost increases even on par with general inflation.”

Employers Working Locally

Prominent among other efforts are regional business health coalitions, represented nationally by the National Business Coalition on Health (NBCH). Board chair, Karen van Caulil, who also serves as CEO of the Florida Health Care Coalition, responded to the Alliance announcement with a suggestion.

“Our coalitions have been doing this work for years in their respective markets and have the regional intelligence and boots on the ground to make a difference. Many of the companies engaged in this new alliance are not involved in the regional coalitions and we would welcome them to play a more active role to bring about change in the communities where their employees live and work.”

The St. Louis Business Health Coalition also is the key driver of the Midwest Health Initiative (MHI), a broad-based, collaboration involving providers, payers, citizen groups, labor unions and employers. MHI stewards a data asset on regional on disease prevalence, care quality, and treatment patterns

Employers Aligning Nationally

On a national level, incoming NBCH CEO Michael Thompson believes “longer term reform, frankly, is going to come from the private sector aligning with the public sector,” which must take the lead. There is, he says, “a dire need for public programs like Medicare and Medicaid to get control of the situation.” Business should work at the local level, supporting engagement and driving change in their communities.

Such alignment could ensure health care purchasers – government and private – send clear and consistent signals to providers. However, it only makes sense with well-designed, proven payment models suitable for private sector application.

However, few employers currently are engaged in the Health Care Payment Learning and Action Network (HCP-LAN) established by CMS for public-private collaboration on value based payment initiatives. Pleading with employers to get involved, Wal-Mart’s Welborn says, “We need to be at the table with our best guess about what might work and then be willing to take a gamble, pilot a few ideas, and share outcomes.”

“We are highly encouraged by the willingness of our health system partners to engage with us and make investments that will support the changes needed to better deliver care, says Jeff White, Boeing’s director of health care strategy and policy.

Employees still have a choice between a Preferred Partnership and a more traditional plan. However, to encourage participation in the former, Boeing provides employees with incentives such as free primary care visits, lower employee paycheck contributions and higher company contributions to health savings accounts.

Participation has reached 35 percent in the Seattle area, where Boeing first launched the program, and ranges between 15 and 30 percent in the remaining markets. According to White, employee satisfaction is high, averaging 8.5 out of 10.

Intel, another, large, direct-contracting employer, “believes it is time for employers to work more directly to transform the payment and delivery systems for healthcare.” It has engaged directly and deeply in benefit design and delivery with Presbyterian Healthcare Services for its New Mexico employees.

Other large employers, like Lowes, Wal-Mart and McKesson, are participating in an Employer Centers of Excellence initiative through the Pacific Business Group on Health (PBGH) . They send employees directly to nationally recognized institutions like Johns Hopkins and Cleveland Clinic for orthopedic surgery and cardiac care.

Employers need not be large to contract directly – and successfully – with health systems, as employers of all sizes have found in Springfield, MO. There, the city government, local utilities, the public schools and Bass Pro Shops have deals with Mercy Springfield, which has been direct contracting with employers for 20 years. In fact, Mercy’s direct to employer business is its largest contract group.

Four years ago, Mercy began to accept limited risk. “We will give you basically a target and guarantee you less [cost] than where you’d expect to be in the next year,” David Cane, Mercy’s regional vice president of payer relations and contracting, explained to John Morrissey of Health Progress. “And if we don’t reach that, then at the end of the year, we’ll just write you a check for the difference, up to where the target was.” Morrissey reports that Mercy has yet to write a check.

Mercy apparently has a knack for working directly with employers. The Springfield hospital is one of the select few participating in the PBGH Centers of Excellence initiative. Meanwhile, the Mercy system in St. Louis, of which Mercy Springfield is a part, is Boeing’s direct contracting partner in St. Louis.

Perhaps the best way for an employer to become a better buyer is to collaborate with a better provider and together chase rainbows.

Gilead aims to eradicate hepatitis C from the planet and has enlisted an entire nation as its demonstration lab. In return, the Republic of Georgia has gotten the best possible price on Harvoni (ledipasvir-sofosbuvir), the company’s hepatitis C drug that lists at $1,150 a pill in the U.S.

Gilead donated an initial 5,000 courses of Sovaldi (sofosbuvir) and, this fall, began supplying Harvoni, which it began donating at a rate of 20,000 courses annually this fall upon its approval by Georgia.

The Georgian government is funding other costs associated with the program, such as screening, administration and monitoring. Harvoni is a once-daily tablet while patients must use Sovaldi with other medications.

With just a population of five million, Georgia has the world’s third highest prevalence of HCV infection, exceeded only by Mongolia and Egypt. As many as seven percent of the nation’s adults carry the virus, a blood infection which can destroy the liver. Worldwide, HCV infects an estimated 130 – 150 million people and killed 700,000 in 2013.

By the end of August, the Georgians had completed a population based prevalence survey, registered 10,564 patients in the program, started treatment on 3,022 and recorded cures for 122 of 125 patients completing a 12-week regimen. Some estimates place the total number of Georgians infected at 200,000.

Progress but Obstacles

Despite this early progress, the Georgians are facing obstacles inherent in the complexity of the disease and the variety of current therapies, including interferon, multiple anti-virals, Sovaldi and Harvoni. These obstacles will hinder eradication there or anywhere else – as noted by “Alexandre,” a Georgian HCV patient interviewed by Georgia Today.

“I try not to worry,” said Alexandre, “My biggest concern is that our infectionists lack experience with hepatitis C management. The disease emerged in the 80’s and despite a large number of variations in the treatment formula, it needs high professional experience.”

The virus, discovered in 1989, has six different genotypes, the prevalence of which varies from nation to nation. Genotype 1 is most common in the United States at 75% of those infected. In Georgia, genotype 1 drops to 43%, accompanied by genotype 2 at 20% and genotype 3 at 37%.

As a result, selecting the right treatment alternative typically requires – even in the United States — a specialist to type the virus, assess the patient, avoid harmful drug-drug interactions and monitor for potential side effects. “Alexandre,” for example, suffered an allergic reaction from a prescribed adjunctive medication, ribavirin. Patients must also strictly adhere to their medications or risk full recovery.

In the United States, the National Institutes of Health (NIH) is conducting a clinical trial in Washington, DC, to assess the effectiveness of treating hepatitis C with Harvoni in community clinics led by primary care physicians, nurse practitioners, and physician assistants. Based on trials conducted by specialist teams, the Food and Drug Administration (FDA) approved Harvoni in October 2014, but only for genotype 1; approval for genotypes 4, 5 and 6 came in November 2015.

Miracle Cure for Hepatitis C

However, a solution for the specialist bottleneck is on the way — the first all oral, single tablet chronic HCV regimen for every genotype, simple to use regardless of prior treatment, disease stage or anti-viral resistance. Potential side effects are modest, most commonly fatigue, nausea and headache. “This is what a miracle looks like,” enthused one hepatitis C activist on Twitter.

Groundbreaking results from clinical studies of Gilead’s sofosbuvir (Sovaldi) – velpatasvir (SOF/VEL) combination recently appeared in the New England Journal of Medicine here, here and here, and in the Annals of Internal Medicine here and here.

The new drug is on approval fast tracks in both the U.S. and Europe. The FDA has assigned SOF/VEL a Breakthrough Therapy designation as an investigational medicine that may offer major advances in treatment over existing options. It has also set a PDUFA approval target date of June 28, 2016. Meanwhile, the European Medicines Agency (EMA) has granted SOF/VEL Accelerated Assessment.

“This drug regimen changes the standard of care in treating patients with HCV. We can now cure almost everyone with a very simple treatment,” explained Dr. Jordan Feld, MD, MPH, lead author of the NEJM studies, to the Toronto Star.

“Knowing which treatment to use for which patient required expertise, which made it much more difficult for non-specialists to treat hepatitis C. With the single tablet that is effective for all strains of the virus, it’s hoped that family doctors, internists and nurses will step in to treat hepatitis C,” he added.

“There are some who believe that the future is a one-size-fits-all single pill, such that a primary care doctor could prescribe it without having to be concerned about genotype, viral load, or complications,” concurred Ronald Sokol, MD, of University of Colorado School of Medicine and Children’s Hospital Colorado during a liver disease conference in November 2015.

Weighing in, too, were two key CDC leaders via a NEJM editorial: John Ward, MD, Director of the Viral Hepatitis Program and Jonathan Mermin, MD, MPH, Director, National Center for HIV/AIDS, Viral Hepatitis, STD, and TB Prevention (NCHHSTP). They said sofosbuvir–velpatasvir regimen could simplify HCV management, “paving the way for simple ‘test and cure’ strategies appropriate for primary care and other settings, such as addiction-treatment programs.”

In noting that this new medicine removes significant clinical obstacles to hepatitis C eradication on a global scale, Ward and Mermin are very concerned that financial and access barriers could be thwarting:

“The availability of simple, safe, and curative regimens creates opportunities for improving the health of the millions of patients living with HCV infection. At a population level, the effect of HCV medications will be determined by affordability and equitable access to HCV testing, care, and treatment. Only through these improvements can our focus be directed to what matters most: reducing the morbidity and mortality associated with HCV infection, stopping HCV transmission, and ultimately eliminating HCV as a public health threat in the United States and worldwide.”

Pricing the Miracle Cure

How do you price a new miracle cure for hepatitis C, serving both shareholders and patients? Gilead likely is still working the problem, deploying a process much like the one it used to price Sovaldi. The U.S. Senate Finance Committee revealed the process in a December 2015 report, which the Wall Street Journal described as providing “perhaps the most transparent look ever into pricing decisions in the modern drug business.”

Then, amidst U.S. market competition and payer resistance for 2015 sales, it discounted both Solvadi and Harvoni by an average of 46% to an estimated $643 per tablet for Sovaldi and $536 per tablet for Harvoni.

In Europe, Gilead negotiated a $536 per tablet price for Sovaldi with both Germany and France, although the deal with France includes volume incentives. Globally, list and negotiated prices tracked a nation’s ability to pay, as measured by gross domestic product, gross national income and health expenditure per capita.

Meanwhile, Gilead has signed licensing agreements with 11 Indian generic manufacturers to produce and distribute generics for Sovaldi and Harvoni in 101 developing countries. In addition, it has signed agreements with three companies in Egypt and Pakistan for local distribution within those countries.

In May 2015, Médecins Sans Frontières/Doctors Without Borders (MSF) reported that one of the Indian generics makers was charging $189 per 28-day-supply bottle, or $567 for a full 12-week treatment course of sofosbuvir (Sovaldi). However, it is unhappy with Gilead’s generic licensing strategy, saying that it prohibits licensees from selling in 50 middle-income countries and excludes additional generics makers who want licenses.

Setting the Stage for Launch

Notably, Gilead has already included its breakthrough SOF/VEL combination drug in these generic licensing arrangements, anticipating approvals from the FDA, EMA and regulatory bodies elsewhere. Alluding to SOF/VEL and its forthcoming launch, MSF notes, “People living with HCV and governments around the world have high expectations.”

However, MSF suggests governments do not have to wait for “patent and regulatory barriers” to come down, especially in middle-income countries. To secure access to affordable treatment, MSF advises:

“Through measures taken at the domestic level, or through collective engagement at the international level, low-cost generic medicines – which cost a fraction of the high prices charged by Gilead – could be provided.”

The Republic of Georgia is among the 50 middle-income countries MSF wants included in Gilead’s voluntary licensing program – “or else.” Rather than expand its licensing program to these countries, Gilead reveals a different strategy with its Georgian demonstration project – one of engagement with these nation’s governments coupled with financial assistance from multilateral organizations.

“We will take the Georgia data to other countries around the world to really make the case that investment can fundamentally change the disease over time,” explained Gregg Alton, Gilead’s executive vice president, corporate and medical affairs. “Gilead cannot cure hepatitis C globally on our backs alone.”

Launching the Miracle Cure

Just another pharmaceutical product launch, SOF/VEL will not be. Instead, look for Gilead to announce a global campaign to eradicate hepatitis C, answering the global call of patients, health systems, governments, multilateral organizations and even the Economist newspaper.

Photographs will show generics produced and ready to ship, videos will document compelling patient stories in Georgia, agreements will chart the expansion of Georgia-like demonstrations and support from multilateral organizations. Perhaps, even MSF and Gilead leaders will stand together at the press conference.

In the U.S. and the developed world, shifting to a primary care screen and treat model, removing the specialist bottleneck, should provide an increase in patient starts justifying list and negotiated prices much lower than those of Sovaldi and Harvoni.

Watch, too, for the rollout of education campaigns to increase screening and diagnosis, and special initiatives in prisons and among substance abusers, recognizing that about half of all those with HCV have yet to be diagnosed. Again, at the press conference, expect representatives from government, medical societies and the big pharmacy benefit managers to stand with Gilead.

Scale has its limits, as the nation’s two largest pharmacy benefit managers (PBM) are discovering. Express Scripts and CVS Caremark each process more than a billion prescriptions a year. That is not enough for big customers Anthem and Aetna. Both are likely to alter dramatically or not renew long-term contracts set to end in 2019 with the PBM behemoths.

PBM Optionality for Anthem, Aetna

Anthem and Aetna say they now have “optionality” because Cigna and Humana, which they are respectively acquiring, both have PBMs. That optionality goes well beyond the scale Aetna would enjoy as the fourth largest PBM. It can put the pharmacy benefit, integrated within each organization, on the path to value-based health care.

Both the Humana and Cigna PBMs align well with the quality and outcomes focus of value-based health care. Humana’s PBM primarily supports the company’s Medicare Advantage (MA) and Part D programs, with MA accountable care arrangements delivering better outcomes than traditional Medicare.

Meanwhile, Cigna has pioneered outcomes-based reimbursement arrangements with pharmaceutical manufacturers. Previously overseeing Cigna’s PBM was none other than Aetna CEO Mark Bertolini; Cigna CEO David Cordani will serve as chief operating officer of the new Anthem.

In fact, the very tools used to leverage scale to get lower prices, such as formulary exclusions, can potentially work against reducing total costs. In securing a substantial discount from AbbVie for Viekira Pak, Express Scripts excluded Gilead’s Harvoni from its 2015 formulary. Viekira Pak is a four pill a day regimen to Harvoni’s adherence-friendly one pill for curing hepatitis C.

Not surprisingly, given their focus on overall costs, Aetna, Anthem, UHG and Cigna all included Harvoni on their formularies and do not publish exclusion lists like Express Scripts and CVS Caremark. Instead, they typically establish clinically based prior authorization criteria.

For the latest high-cost drugs to hit the market, Express Scripts is following the health plans on their value path. Instead of excluding one of two new anti-cholesterol drugs, known as PCSK9 inhibitors and list priced at $14,000 per year, it announced coverage for both this week.

As the health plans did with Harvoni, Express Scripts will implement rigorous prior authorization procedures. The company says it negotiated good pricing with Amgen for Repatha and with Sanofi and Regeneron Pharmaceuticals for Praluent, enabling it to cover both drugs. Perhaps it also heard from customers unhappy with price-driven drug exclusions.

Wanting More, Customers Become Competitors

Clearly, some very big customers – Aetna, Anthem and UHG – want something more than scale from traditional PBMs like Express Scripts and CVS Caremark. Beyond scale, they want a pharmacy benefit that contributes to reducing total costs through better outcomes, consistent with achieving overall value-basedpayment goals.

Building PBM paths to value-based health care for themselves, Anthem, Aetna and UHG will also sell against volume-based models like those of Express Scripts and CVS Caremark, and against health plans that fail to integrate pharmacy and medical claims for actionable intelligence.

Employers and the Limits of Scale

Their strategy blueprint could easily have come from the Harvard Business Review article “The Limits of Scale.” Hanna Halaburda and Felix Oberholzer-Gee argue that, when rapidly scaling companies neglect to take into account differences among their customers, performance declines. On that premise, they suggest how challengers and incumbents can take advantage of customer differences.

Among PBM customers with differences are employers, which provide health coverage for 147 million Americans. The National Business Coalition on Health is uneasy with the growing use of exclusionary formularies. It advises members to “base selection criteria for formularies on clinical outcomes to ensure that pharmaceutical costs do not decrease at the expense of rising medical costs.”

Employers are becoming more actively engaged in managing the pharmacy benefit, even developing their own formularies and negotiating directly with pharmacy retailers. Caterpillar’s Daren Hinderman told an NBCH panel last year, “I don’t want to have a conversation [with PBMs] on rebates; I want to have a conversation on how I can keep my employees more compliant with medications they need to stay healthy. We decide what’s best for our employees. It’s a transparent process.”

NBCH also urges members to “verify that pharmacy and medical benefits are aligned, and link data between the two in order to evaluate cost and outcomes across both types of benefits and the entire health-care spectrum, not just through the lens of pharmacy.” As Dr. Mark Fendrick of the University of Michigan Center for Value-Based Insurance Design told the NBCH panel, “I’d prefer to spend more on statins than on stents.”

Obstacles on PBM Value Path

Mapping the PBM path to value-based health care is one thing, building it is another. Aetna and Anthem still must face a gauntlet of government and legal reviews before they can complete their acquisitions and commence integrating the Humana and Cigna PBMs.

Meanwhile, the Catamaran acquisition has roiled a PBM industry where many participants use Catamaran’s RxClaim platform – including Cigna! They were content to compete with Catamaran, despite using its technology. However, will they be similarly comfortable with OptumRx and UHG in the technology driver’s seat?

Much like UHG’s acquisition of Catamaran and its technology, Rite-Aid did the same when it acquired EnvisionRx. The PBM had previously acquired Laker Software, also a claims platform supplier for many PBMs. Again, the comfort question arises, in this case over Envision and Rite Aid as the drug retailer pursues its path to value-based health care via innovative alliances with health care providers.

Making the Laker and RxClaim platforms particularly valuable has been the PBM industry’s reliance on a hodge podge of decades-old, antiquated platform technologies. With each acquisition, scaling PBMs have patched together instead of invested in their platforms to maximize short-term synergies, at the cost of limited flexibility and lower efficiency.

PBMs Miss Technology Revolutions

Meanwhile, multiple revolutions have coursed through the systems development world since the PBM industry acquired its mainframes and data centers in the late 1980’ – early 1990’s. When relational databases followed soon thereafter, PBMs adopted them for after-the-fact data analysis, but not broadly for real time use with claims processing platforms, which now are antiquated and fragmented.

More recently, graphical user interfaces have greatly streamlined the programming of business intelligence applications. It is now easier for more people, more efficiently to translate their expertise into innovative systems. No longer must visionaries exclusively funnel their solutions through highly specialized programmers and coders. Now, the visionaries’ can become coders, their hands on the programming controls, unleashing new applications across the entire economy, including the PBM industry.

PBM Platform for Value-Based Health Care

One such visionary has developed a PBM solution for value-based health care. His name is Ravi Ika. “The solution is holistic, unlike that of any other existing PBM. It reduces overall pharmacy cost, converts specialty from ‘buy & bill’ to ‘authorize and manage,’ and lowers avoidable drug-impacted medical costs,” explains Ika.

Before turning his attention to the PBM industry, he created a comprehensive, integrated payer platform now provided by ikaSystems, which he founded to transform the payer operating model. Spanning all payer departments and business lines, it decreased administrative costs for health insurers by as much as 50% and reduced avoidable medical costs.

In 2013, Ika launched RxAdvance, a full service PBM, which similarly operates on an integrated, end-to-end platform – one designed specifically for value-based health care. Combining pharmacy, medical, and lab data, the platform – called PBM Collaborative Cloud– enables real-time engagement. This engagement occurs with physicians at the point of care, pharmacists at the point of sale, and patients via mobile cloud. It also engages payers clinical and pharmacy staff through their workflows.

PBM Processes Reimagined

“We started with a clean slate,” observes Ika, who says he and his team reimagined PBM processes to streamline workflow before building the platform. Redefining the human role, they automated as much as possible while, on the other hand, increasing opportunities for engagement, what-if modeling, and informed decision-making. The platform also enables market and regulatory changes configurable by the business user, as well as system-driven compliance management.

Ika built the platform from the ground up using a unified data model. In information technology parlance, that means the platform’s standards are universal enough to encompass a large scope of data and types of data with high scalability.

From Existing to Ideal Formularies

For example, the platform includes algorithm-driven artificial intelligence to manipulate, with plan sponsor engagement, the complex and interdependent variables associated with formulary management. Incorporating habitual member and prescriber utilization patterns, in addition to other data, it derives an ideal formulary with optimal financial and clinical outcomes. The system then maps a transition plan from an existing formulary. The platform also accommodates an unlimited number of formularies and supports real time dynamic modeling and changes coupled with full transparency.

Better Medication Therapy, Adherence Outcomes

For medication therapy management (MTM), the platform taps patient medical claims and disease conditions, against which the system overlays a prescription listing for easy use by prescribers. In addition, each new prescription triggers a dynamic analysis to determine patient eligibility for a comprehensive medication review (CMR), which the system prepopulates for efficient prescriber use.

After the CMR, RxAdvance advisors rely on system alerts to intervene with patients to ensure medication adherence. For high-risk patients, RxAdvance will install an electronic, patent-pending pill station at their residences and resupply it with disposable pre-filled pill trays.

Integrated with and wirelessly connected to the company’s platform, the device assists with monitoring adherence and vital signs. The company says the device has improved adherence to more than 93%, including patients with multiple chronic conditions who are taking an average of 15 medications a day.

The Centers for Medicaid and Medicare Services (CMS) recently underscored the PBM need for physician-led, point-of-care MTM capability when it announced a new Medicare Part D MTM model. Currently, highly fragmented PBM MTM relies on pharmacists “chasing” patients without closing the loop with prescribers, thus failing to secure meaningful health outcomes, according to Ika.

Ika points to the RxAdvance specialty management program as another example of his platform’s capabilities. As it does for MTM, the platform integrates prescriptions, medical claims and disease conditions to create an action plan for all stakeholders. Case managers use a dashboard to prioritize their outreach to patients, prescribers and pharmacists. Because the platform integrates medical, pharmacy and lab information, it helps facilitate appropriate utilization.

Risk Sharing

One of the hallmarks of an organization configured for value-based health care is its ability to share risk. The RxAdvance unified data model platform enables it to share risk for both pharmacy and avoidable drug-impacted medical costs. For pharmacy, it is prepared to assume both up and down side risk based on its cost management performance against a risk cap set below a national benchmark projected increase.

The company can also compute a baseline trend for avoidable drug-impacted medical costs using prior years’ medical claims data. RxAdvance and its client then set a target and, if the PBM lowers actual avoidable drug-impacted medical costs, it will share in the savings. According to Ika, this sort of risk sharing is unique in the PBM market.

Ika reports that RxAdvance is currently implementing full PBM services for three clients, replacing national PBMs. “The Collaborative PBM Cloud platform is making for a very smooth launch,” he notes.

RxAdvance has gotten a head start along the PBM path to value-based health care, scaling the limits of scale.